For the first time, Iranian President Mahmoud Ahmadinejad acknowledged its nuclear weapons program when dismissing the UNSC resolution imposing limited sanctions against Tehran as a "piece of torn paper" meant to "scare Iranians."

For the first time, Iranian President Mahmoud Ahmadinejad acknowledged its nuclear weapons program when dismissing the UNSC resolution imposing limited sanctions against Tehran as a "piece of torn paper" meant to "scare Iranians." He said that it is in "Westerners' interests to live with a nuclear Iran" and that the resolution that rules out military strikes "will not harm Iran and those who backed it will soon regret their superficial act."

Claiming not to be "worries or uncomfortable with the resolution," Ahmadinejad said that his nation will "celebrate" its "atomic achievements in February" raising concerns that Tehran may be testing a nuclear device then. Iran's top nuclear negotiator Ali Larijani also revealed plans about Iran's "immediate response to the resolution" that it will immediately "begin activities at Natanz" where "3,000 centrifuge machines" will be installed and that Tehran will "drive it with full speed." Iran also threatened to change the level of cooperation with the International Atomic Energy Agency (IAEA) but did not specify what those changes may be.

The Iranian Parliament has also started deliberations on approving a new policy direction with "double urgency." A new bill, passed by Parliament's National Security and Foreign Affairs Committee, may call for a suspension of IAEA inspection of Iran's nuclear sites in complete violation of the Nuclear Non-Proliferation Treaty (NPT). Ahmadinejad had threatened to pull out of the NPT if sanctions are imposed and this measure may be the first step in that direction.

Despite such open defiance, Moscow said that it will continue it cooperation with Iran on both nuclear power generation and defense as it is in its "economic interests" to execute on "signed contracts with Iran." Russia is building a nuclear power station at Bushehr and supplies air defense missile TOR-M1 and S-300 systems. Russia also managed to convince other UNSC members to drop reference to Iran's first nuclear plant it is building and limiting language to non-military curbs on nuclear weapons, enrichment, and heavy water reactors. Western governments had wanted tougher language only to be thwarted by Russia and China for commercial self-interest and Qatar for religious reasons. Finally, all language dealing with military option, international travel restrictions by Iranian nuclear and missile development officials, and specified banned items and technologies were dropped. Therefore, Ahmadinejad's characterization of the UNSC resolution as "torn paper" is not off the mark as it is more of a symbolic gesture than hard-hitting.

Iran has always insisted that its nuclear program is to produce energy but Western governments are suspicious of these assertions because of circumstantial evidence that link Tehran to a more surreptitious nuclear weapons program. After all, Tehran had bought weapons technology from disgraced Pakistani nuclear scientist A.Q. Khan and had threatened the existence of Israel many times. If Tehran does test a nuclear device, Israel's decision to follow suit is a fait accompli and will spur other regional powers such as Iran's Sunni rival Saudi Arabia to follow suit which will destroy any nuclear weapons world order built over the past several decades.

Recently, a US researcher has also accused Iran of creating a crisis over nuclear weapons to create a collateral crisis in the oil industry to mask its own infrastructural failures in domestic oil industry. John Hopkins researcher Roger Stern says that several years of infrastructural neglect and anemic investments in the oil sector is threatening inflow of cash and Ahmadinejad is using the nuclear crisis as an alibi to save the clerical regime. Writing in the respected Proceedings of the National Academy of Sciences, Stern writes that "The regime's dependence on export revenue suggests that it could need nuclear power as badly as it claims." For decades, successive Iranian governments had handed out generous subsidies for gasoline which means that its oil companies can make money only through exports. However, rapid population growth has spurred domestic consumption and officials have let refinery capacity and pipelines falter with domestic demand growing at 6.4% since 1980 while supply growth has been limited to 5.6%. Sterns says that this is why exports have stagnated since 1996.

The professor of geography and environmental engineering says that despite Iran being the second largest exporter of oil in the Organization of Petroleum Exporting Countries (OPEC), it has to import oil products such as gasoline to meet domestic demand. And, for the last 18 months, Iran has failed to meet its quota for oil production set by OPEC and Sterns suspects this to be due to a fall in oil production and therefore precluding Tehran to enjoy the bonanza that exporters have enjoyed from a period of record-high crude prices.

Sterns study says that a nationalistic government is making the problem worse by creating hardship for foreign oil companies and cites Tehran's sudden 180 degree policy turn in its deal with Indian oil companies citing contractual problems after New Delhi voted against Iran's nuclear weapons program at the IAEA. But in actuality, Stern suggests that the drop in "Iran's petroleum investment climate" seems "to have greatly deteriorated since 1998-2004" when "investment was insufficient to offset the recent production decline." Alarmingly, Stern predicts that "Zero future investment thus appear plausible." In summary, Stern says that "Iran's claim to need nuclear power might be genuine" because of "anticipated export revenue shortfalls" but does not discount accusations of a nuclear weapons program to entrench the radical regime in power. Which only shows that the "Iranian regime may be more vulnerable than is presently understood."

This recent study has vast implications for India which looks to Iran as a possible reliable supplier of energy. Tehran has backed out of contracts, demanded open-ended contracts, and even managed to get a higher price for its natural gas linked to crude oil. However, are these tactics really to delay the delay the contracts in an effort to mask production issues till they are rectified or genuine differences over pricing?

Side-stepping questions on how Indian views the sanctions, New Delhi said that it is studying the "implications" but refused to stray from well-rehearsed lines. India believes that Iran is entitled to all benefits of the NPT for civilian purposes but also holds Tehran accountable to its international obligations. India is very concerned with the clandestine enrichment program that Tehran is pursuing and has said that it does not want another nuclear weapons state in its neighborhood. It has also said that it believes that Iran has such a secretive program which is not in India's national interest. The new line however is that India believes now that the case must be solved with the IAEA playing a "central role" to resolve "outstanding issues" when it has voted twice to take the case to the UNSC.